Heating oil tank locks can help prevent thieves syphoning oil. Thefts of heating oil tanks have spiked in rural areas of the UK. (image: cusworth.net)

Organized criminal groups are tailing heating oil delivery trucks and casing rural British properties before returning at night to steal the “liquid gold”.

A spike in the price of fuel oil across the UK has contributed to a 500 percent increase in the number of Welsh heating oil thefts in the last five years, the BBC reports. There is now the equivalent of one heating oil theft every day. The numbers jumped from 68 in 2007 to 364 last year, according to statistics released under the Freedom of Information Act.

Insurance specialists say the rise in heating oil thefts is closely linked to the commodity’s volatile price. When prices spike, heating oil becomes more attractive to criminals. Heating oil thefts are much more common in the UK than here in the US, though instances of American thieves targeting the fuel have increased in recent years as prices climbed.

The cost of oil has risen sharply in the UK this winter, when temperatures plummeted to 30-year lows. Nicola Whittaker, rural affairs specialist from insurance firm NFU Mutual, said there had been a noticeable increase in claims from farmers and rural homeowners.

Just before Christmas, a Welsh property near Welshpool was hit. One-thousand litres (264 gallons) of heating oil worth £700 ($1100) was siphoned from a tank. Many rural homes rely on heating oil because they are not connected to gas mains supply. Their tanks are often visible and accessible from roads for ease of delivery, making them more susceptible to thieves.

“It did really start to increase towards the end of 2010 because the price of oil increased by about 70 percent,” Whittaker said. “That trend continued into 2011. We were seeing a lot of oil going missing from farms and homes in rural areas.”

While more businesses were generally targeted in oil thefts across the UK, homes were more likely to be hit in Wales.

“Heating oil is a lucrative commodity for thieves when the market value peaks; as such we are advising people to treat their supply like liquid gold.”

Most of the crimes are thought to be carried out by organised criminal gangs, who check out properties in advance, sometimes following delivery tankers to identify targets, then return at night to steal the oil.

Police Tips To Prevent Heating Oil Thefts:

* Fit a secure tank lock.
* Check oil levels frequently.
* Arrange smaller but more frequent oil deliveries.
* Install movement sensor security lighting around the tank.
* Screen tank from view with shrubs or fencing.
* Install lockable access gates, and erect lockable fencing.
* Fit an alarm system which warns if oil levels drops suddenly.
* Be vigilant following a delivery.

Senator Bob Casey is campaigning for a senate hearing into what effect the closures of three Northeast refineries will have on the region's energy consumers. (image: pennlive.com)

Three US lawmakers are calling for a high-level hearing into refinery closures in the Northeast, which are tipped to cause price hikes for millions of heating oil users, Reuters reports. The call comes as hundreds protest in Pennsylvania against the refineries being shut down, marching in numbers on Saturday on Gov Tom Corbett’s office.

Senator Bob Casey (D-Penn) asked on Friday for a Senate hearing to investigate job losses and potential shortages of refined products should three Philadelphia-area refineries be permanently idled. Casey, along with US Representatives Pat Meehan (R-Penn.) and Pennsylvania state Representative Thaddeus Kirkland met with United Steelworkers (USW) union presidents from the three refineries to discuss their concerns.

In a letter to Jeff Bingaman (D-NM), chairman of the US Senate Committee on Energy and Natural Resources, Casey said he was concerned about the 6000 jobs being lost. But he was also alarmed at the possibility of price spikes for gasoline and particularly heating oil up and down the Northeastern US.

“If no buyer is found and these facilities were to permanently close, the loss of our refining capacity on the east coast will have a substantial ripple effect across the nation’s economy.”

ConocoPhillips shut down its 185,000 bpd refinery in Trainer in late September. Union officials believe the refinery will be razed if no buyer is found by the end of March. Sunoco’s 335,000 barrel per day Philadelphia refinery is still operating, but is scheduled to close at the end of June if it isn’t sold. Sunoco also owns the 178,000 bpd refinery in Marcus Hook, which was idled late last year.

The three refineries are within a 12-mile radius of each other in southern Pennsylvania. They collectively account for over half the Northeast’s refining capacity. A December study by the US Energy Information Administration warned the closures could result in spot shortages of refined petroleum products, causing supply disruptions and spiking prices, particularly in the Northeastern heating oil market.

The Northeast is the nation’s biggest heating oil user. Around 6 million of the region’s homes rely on heating oil as their primary source of warmth. Three Northeast lawmakers have already written to Energy Secretary Steven Chu calling for the Northeast heating oil reserve to be boosted to two million barrels as a safeguard and have asked the Federal Trade Commission to investigate the refinery closures on behalf of energy consumers.

The USW union has also warned idling the refiners could increase the nation’s reliance on foreign oil imports, leaving the US at the mercy of volatile international oil markets and geopolitical developments like the Libyan conflict and worsening standoff with Iran.

Jim Savage, the Philadelphia refinery union president, said union officials had asked the legislators to step in and show some leadership, after pleas to other local legislators went unanswered.

“A lot of people thought this was end of the process. There is still a lot of fighting left,” he said.

Mild temperatures have tempered heating oil demand but high prices mean residential fuel oil expenditure is tipped to hit record highs this winter. (image: zimbio.com)

Despite much of the country experiencing its fourth warmest winter on record, residential heating oil expenditure is still tipped to hit record highs this winter, giving little reprieve to struggling homeowners.

It its weekly petroleum report, the US Energy Information Administration said Thursday the average household is forecast to spend $2326 heating their home with fuel oil this winter. That’s slightly higher than the previous record high - $2300 posted last winter.

“The primary driver for this winter’s high heating oil expenditures has been heating oil prices, not consumption,” the EIA report says.

The heating season runs from October through March. At the start of winter, the EIA predicted the average home would spend a record $2500 on winter heating oil costs. But as the mild winter progressed and domestic heating oil use plateaued, officials revised the average expenditure figure down by $110 in January and lower still in its latest forecast.

“While unseasonably warm weather has continued (January 2012 was about 19 percent warmer-than-normal in the Northeast), winter heating oil expenditures for the average household are nevertheless likely to remain the highest on record due to continued seasonal record high heating oil prices,” the EIA report says.

About 6 percent of US homes rely on heating oil as their primary source of warmth, with about 80 percent of them in the Northeast.

The EIA says two main factors drive heating oil expenditure – temperature and price. And while temperatures have waned, heating oil is still commanding strong prices on world commodity markets for a number of reasons.

Volatile international crude oil prices play a big part. The current Iranian crisis over the Middle Eastern nation’s apparent bid for nuclear weapons has seen oil prices strengthen in recent months as sanctions spark fears of supply shortages. This has an immediate effect on the price of any refined petroleum product such as gasoline, diesel or heating oil.

Fears the closure of three Philadelphia refineries will lead to heating oil shortages have also sent fuel oil prices heading north and sparked calls for a congressional hearing into the potential effect on energy consumers.

But strong international demand for distillate fuels, which include heating oil and diesel, is also singled out by the EIA.

“Although heating oil has been declining as a share of total distillate consumption, global diesel fuel demand has been growing and will likely continue to grow, assuming strong economic activity in developing countries such as China, India, and Brazil,” the report says. “EIA’s expectation of increasing global petroleum demand, especially transportation fuels, over the next few years results not only in high world oil prices in general, but also in rising distillate prices in particular.”

The report finishes with further gloom for heating oil customers. This month’s Short Term Energy Outlook predicts average retail heating oil prices next winter will hit $3.97 a gallon –15 cents a gallon higher than the current projection for this winter.

Maine heating oil dealer Ike Libby touched the nation's heart after delivering heating oil to an elderly couple who could not afford to pay. (image: wcsh6.com)

A newspaper story on a struggling heating oil dealer’s benevolence has sparked a national outpouring of generosity for cash-strapped oil heat customers, the Huffington Post reports.

Ike Libby runs Hometown Energy, a fuel oil delivery business in Dixfield, Maine. Like countless heating oil dealers around the country, Libby is no stranger to the hardship faced by many of his customers and the difficulties they face paying winter fuel oil bills.

When pensioner Robert Hartford tried to hand over the title to his 16-year-old Lincoln Town Car in exchange for heating oil to prevent him and his disabled wife from freezing, Libby filled their tank without payment, rather than seeing the elderly couple go cold.

But he never expected the outpouring of generosity that would follow.

The story appeared on the front page of Saturday’s New York Times and appears to have struck a chord with readers across the country, many of whom immediately wanted to help.

On Monday morning, when Libby went to work, the cards, checks and credit card donations started rolling in. They now total more than $100,000 in cash to help heat impoverished customers’ homes, the Lewiston Sun Journal reports.

“I didn’t expect this to happen,” he said. “You can’t even put it into words. America’s got a heartbeat and we are hearing it.”

One of the letters read: “A donation to Hometown Energy. Good luck, thanks for caring.” It was a check for $5000.

“We struggle as a business,” Libby told WCSH. I’m getting some credit for this. [But] I’ve just been trying to do my job.”

An emotional Libby said he had set up a trust account for the money to make sure it goes to the people who need it most. Despite a near-record mild winter, heating oil prices remain stubbornly high on strong export demand, fears of supply disruptions from refinery closures and volatile world oil markets.

But those on low incomes also face cutbacks to the federal Low Income Heating Energy Assistance Program (LIHEAP), which has been slashed this year to reduce the federal deficit. The cuts mean Maine’s allowance alone has fallen from $56.5 million to $39.9 million, and has left thousands of people living in cold climates who depend on aid from the program struggling to keep up with heating oil expenses this winter.

Nevertheless, Libby has helped the Hartfords and many other Maine families struggling to stay warm by delivering oil to people he knew couldn’t afford their bills.

“I haven’t always looked out for the best interest of the business, but you know what this has been great.”

The Hartfords have just had their tank refilled. The cost came to $771.72. The receipt left on the door said it had been paid in full. Wilma Hartford, 71, said the outpouring of donations was unbelievable.

“It tells me there’s a lot of good people out there. Sometimes in this world we look at it and think this world is really going to pieces. Bad news everywhere. But this has lifted my spirits and I know there’s a few good people out there.”

Those interested in donating to the heating oil trust can contact Hometown Energy at (207) 562-8822 or mail checks to Hometown Energy at P.O. Box 485, Dixfield, ME 04224. Donations are also being accepted online via Hometown Energy’s website.

Strong overseas demand for US heating oil exports from countries in Europe and South America is supplementing weak US winter demand and pushing residential prices higher. (image: londonhotelsoption.com)

Heating oil contracts ended last week at their highest level in 11 weeks, despite warmer than normal winter temperatures cutting into heating demand, Reuters reports.

Heating oil futures contracts, bought and sold by energy traders on world commodity markets, settled on Friday at $3.1144 a gallon, gaining 6.15 cents, or 2 percent for the day. It was the highest settlement since November 16. Heating oil contracts gained 4.4 percent for the week, or 1.43 percent, extending gains for the second consecutive week.

These movements dictate the price heating customers and dealers pay for their fuel. But the upward pressure on prices might have folks scratching their heads given mild winter temperatures across the US, particularly in the Northeast where millions of homes rely on heating oil as their primary source of warmth.

It’s true that temperatures have been much milder than in previous winters. In fact private forecaster MDA EarthSat says this US winter is the second mildest so far since 1950, running about 30 percent warmer than the 30-year average. For the next fortnight, temperatures in the Northeast are expected to average above normal, with daytime highs topping out in the upper 40s and 50s Fahrenheit, according to AccuWeather.

So what’s driving the ongoing price increases?

Well domestic heating oil stocks are falling and have done so now for six consecutive weeks, according to data released the Energy Information Administration. Last week reserve inventories declined 1.3 million barrels to end at 30.8 million barrels. That extended the deficit from a year ago to 8.3 million barrel, meaning we have less heating oil in storage than at the same time last year.

Total demand for distillates last week, of which heating oil is a major component, was 3.63 million barrels per day - though this was down 1.65 percent on year-ago levels, reflecting the warmer temperatures.

The relatively steady demand for heating oil is being firmed up by overseas demand, particularly from South American countries and Europe. Fuel oil exports are supplementing weak domestic heating oil usage and pushing prices higher.

Strong overseas demand for diesel is also at play. Diesel fuel is almost identical to heating oil in composition. But because there is no diesel future contract, investors often trade heating oil on commodity markets in diesel’s place. When demand for diesel is high, that again pushes up the price of heating oil.

Finally, the closure of several Philadelphia refineries has sparked warnings from the EIA of potential heating oil supply disruptions and accompanying price spikes, spooking investors and pushing prices higher again.

HeatingOil.com recommends homeowners have their heating oil furnaces regularly serviced to ensure they’re running at optimum efficiency, saving you money, and make sure homes are properly insulated to prevent heat loss.

The economic downturn has seen less industry. That means lower oil demand as less trucks are needed to moves goods between states. (image: stltoday.com)

US oil production is on the rise and a federal energy agency predicts it will balloon by 20 percent over the next decade, hitting levels unseen since the 1990s, upi.com reports.

In its annual energy outlook for 2012, the US Energy Information Administration estimates that the nation’s daily crude oil production will reach 6.7 million barrels per day by 2020. Figures released by the agency show oil production increased from 5.1 million bpd in 2007 to 5.5 million bpd in 2010.

US Rep. Doc Hastings, R-Wash, chairman of the House Committee on Natural Resources, stated last month that oil and natural gas production on federal lands was down more than 40 percent compared to the early part of the century. However, EIA acting administrator Howard Gruenspecht said current projections indicated that domestic crude oil production was increasing while reliance on imported oil was on the decline.

“These projections reflect increased energy efficiency throughout the economy, updated assessments of energy technologies and domestic energy resources, the influence of evolving consumer preferences and projected slow economic growth,” he said.

The bullish oil production forecasts reflect the current boom in shale oil and gas reserves that lie beneath the US. Unconventional drilling techniques like hydraulic fracturing and horizontal drilling are helping energy companies tap hard to reach pockets of “tight oil” reserves trapped in shale rock. The EIA said further development of oil deposits in the Gulf of Mexico is also expected to bring domestic crude oil production to forecast levels.

Many commentators argue that a plentiful domestic supply of oil would give the US greater energy security and reduce our reliance on foreign oil imports from unstable nations in Africa and the Middle East, where geopolitical developments often spark volatile spikes in world oil prices. Heating oil prices are closely lined to the those of crude. Many heating oil customers are struggling with the high cost of fuel oil, despite a relatively mild winter heating season so far.

The United States’ reliance on foreign oil has been falling with the boom in local production. But, as indicated by Gruenspecht, greater fuel efficiency and economic factors are also at play. Requirements to make new vehicles more fuel efficient are helping curb the nation’s voracious appetite for gasoline. And many states have phased out heavier, dirty heating oil varieties and mandated ultra-low sulfur heating oil in its place. The cleaner-burning oil is more efficient and much more environmentally friendly.

Finally, the recession has eaten into oil demand. Less commerce means less industry and fewer trucks moving goods between states. Though there are signs the US economy is starting to rebound, economic growth is likely to remain weak, limiting oil demand in the world’s biggest oil-using nation.